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Radford v Hallenstein Bros Limited HC Auckland CIV 2006-404-4881 [2007] NZHC 1654 (22 February 2007)

High Court of New Zealand

Radford v Hallenstein Bros Limited HC Auckland CIV 2006-404-4881 [2007] NZHC 1654 (22 February 2007)

Last Updated: 15 January 2011

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

_{CIV 2006-404-004881}

BETWEEN JOHN RADFORD Appellant

AND HALLENSTEIN BROS LIMITED Respondent

Hearing: 15 November 2006

Appearances: T J Walker & E C Gray for Appellant

B W Morley for Respondent

Judgment: 22 February 2007

_{JUDGMENT OF KEANE J}

This judgment was delivered by Justice Keane on 22 February 2007 at 2.30 pm pursuant to Rule540(4) of the High Court Rules.

Registrar/ Deputy Registrar

_Date:

_Solicitors

Simpson Grierson, Auckland for Appellant

Hesketh Henry, Auckland for Respondent

RADFORD V HALLENSTEIN BROS HC AK CIV 2006-404-004881 22 February 2007

[1] John Radford is a sculptor. Three of his works, large architectural forms completed in 1998, are to be found in Western Park, Ponsonby. He has also one-tenth scale bronzes in a limited edition, a number of which he has still to sell. In

2005 Hallensteins commissioned and sold, as part of its ‘Planet 8’ range, t-shirts made in China, a series figuring on the front with other elements a photograph of two of the three forms. To this Mr Radford objected.

[2] In November 2005 Mr Radford brought a claim on three bases against Hallensteins in the District Court, Auckland. First, he claimed, Hallensteins had breached his copyright in the sculptures reducing by half the value of his unsold casts. Secondly, he claimed, Hallensteins had imported into New Zealand copies of his sculptures, intent on selling them knowing or having reason to believe they infringed copyright. Thirdly, he claimed a breach of his moral rights. Hallensteins had, he claimed, set his sculptures on the t-shirt in a context that was incongruous, distorting and derogatory.

[3] On 17 July 2006 a Judge in the District Court struck out the first two causes of action, under DCR 209, on the basis that Hallensteins had not breached any copyright to which Mr Radford was entitled. The governing principle of the Copyright Act 1994, the Judge accepted, may be that the author of an original work enjoys copyright and the exclusive right to copy and issue copies to the public whether for sale or otherwise. But, as the Judge said, there are exceptions to that principle and Hallensteins, he held, enjoyed the benefit of one. Photographing sculpture in public places, and turning those photographs to profit, the Judge held, was expressly permitted by s 73.

[4] Mr Radford’s first two causes of action, the Judge concluded, on the primary point he had to resolve:

... do no more than raise the age old argument in support of protection of rights of artists so that they can obtain some reward from creating their artistic works. However, it is an argument which has been thoroughly debated, commented upon ... and rejected. In practice it appears to be recognised that if an artist creates a sculpture or building which is permanently in public, their one opportunity of obtaining a reward is for creating the work in the first place.

[5] The Judge held, secondly, though on the pleadings he did not need to and did so presumably only to rule out any thought of amendment, that in permitting copying of sculptures in the public domain, in spite of copyright, s 73 must permit indirect copying of underlying works like drawings or models. To hold otherwise, he said, would be to ‘make nonsense of s 73 giving it no practical application at all’. And it is this point that is the only issue on this appeal. In copying the sculptures, Mr Radford contends, Hallensteins indirectly copied and infringed his copyright in his underlying works, s 73 notwithstanding. He should, he says, have been allowed to re-plead his case.

[6] In order to be effective, Mr Radford contends, s 73 does not need to extend to all underlying works. It creates a more modest but still intelligible exception. It permits sculptures in public places to be replicated, in this case photographed, and even for profit, but only in a restricted array of cases none of which apply here – where there are no underlying works in which copyright inheres, or where copyright has expired in the underlying works, or where any copy does not infringe copyright in such underlying works as there are.

[7] There remains one lesser issue. Hallensteins cross-appeals against the Judge’s decision to reserve costs, when striking out the first two causes of action, until the remaining cause of action, Mr Radford’s claim relying on breach of his moral rights, is determined. That is contended to be contrary to the rules.

Mr Radford’s presumed copyright

[8] The Judge in the District Court was obliged to assume, as I am on this appeal, that each of the sculptures, in which Mr Radford claims copyright, is an ‘artistic work’ in which copyright could inhere: s 2 – ‘artistic work’, para (a)(i); s 14(1)(a). Equally, had the pleadings extended that far, that Mr Radford could have enjoyed copyright, distinctly, in any underlying drawings or models, in which copyright could also inhere. An ‘artistic work’ includes any ‘graphic work’ or ‘model’: s 2 definition, para (a)(i). Indeed, that Mr Radford could have enjoyed copyright in all three at once: Wham-O MFG Co v Lincoln Industries [1984] 1 NZLR 641, CA; Kgaa v Holdfast New Zealand Ltd [2006] NZSC 102; Thornton Hall Manufacturing

Ltd v Shanton Apparel Ltd (No 2) [1989] 1 NZLR 239, [1989] 3 NZLR 304, CA.

[9] The Judge was obliged also to assume, as am I on this appeal, that Hallensteins, by replicating Mr Radford’s sculptures on t-shirts that it sold at retail without any licence from Mr Radford must, unless excused by s 73, have infringed by direct copy his copyright in the sculptures. And, it follows, had the pleadings extended that far, that to the extent that those copies were indirect copies of the underlying works, they infringed any copyright inhering in those latter works as well: s 20(1), (2), 30 and 31. All turns then, as the Judge accepted, on the ambit of s 73.

Ambit of s 73

[10] Section 73, the title to which is ‘Representation of certain artistic works on public display’, says to the extent that concerns us on this appeal:

(1) This section applies to the following works:

...

(b) Works (being sculptures, models for buildings, or works of artistic craftsmanship) that are permanently situated in a public place or in premises open to the public.

(2) Copyright in a work to which this section applies is not infringed by—

(a) Copying the work by making a graphic work representing it;

or

(b) Copying the work by making a photograph or film of it; or

(c) ... (3) ...

[11] The text of s 73, beginning there as s 5(1) of the Interpretation Act 1999 requires, is explicit as to what it excludes from the protection of copyright: works like sculptures, as long as they permanently in a public place, or in premises open to the public. So, taken literally, s 73 only excuses Hallensteins replicating such sculptures. It does not excuse any indirect copying of Mr Radford’s underlying works. It does not explicitly exclude from the protection of copyright ‘models’ of

sculptures on public display, for instance, or ‘marquettes’, ‘elevations’ or ‘drawings’, and whether or not they are on public display. On a literal reading they lie beyond s 73.

[12] To understand, as s 5(1) requires also, whether such a literal reading serves the purpose of s 73 - whether the exclusion from copyright s 73 makes can, may and ought to extend, if only implicitly, to underlying works - one must go to the Act as a whole, set first against New Zealand’s international obligations. Then consider how far the exclusion from copyright s 73 creates must extend to be effective at all.

International obligations

[13] Where possible our statute law must be given meaning consistent with our international obligations; it being presumed that Parliament does not intend to legislate to the contrary: Tavita v Minister of Immigration [1994] 2 NZLR 257, CA at 266; New Zealand Airline Pilots Association Inc v Attorney General [1997] 3

NZLR 269, CA, at 289, Keith J. That is so only, however, ‘if the words of the statute allow it’: R v D [2003] 1 NZLR 41, CA, at 25, Glazebrook J; see also Ashby v Minister of Immigration [1981] 1 NZLR 222, CA at 229: Governor of Pitcairn v Sutton [1995] 1 NZLR 426, CA 430, 438.

[14] There is as well a parallel principle. Where New Zealand has subscribed to a multilateral treaty, which other countries have also subscribed to and implemented, it is desirable that the treaty be interpreted and applied uniformly: King-Ansell v Police [1979] 2 NZLR 531, 540, CA, Richardson J; Commissioner of Inland Revenue v J F P Energy Inc [1993] NZLR 536, CA, at 540, Richardson and Hardie Boyes JJ. But that principle too can be no more prescriptive.

International instruments

[15] Article 9(1) and (2) of the Berne Convention for the Protection of Literary and Artistic Works 1886, to which New Zealand became a party in 1947, states the apposite obligation:

(1) Authors of literary and artistic works protected by this Convention shall have the exclusive right of authorising the reproduction of these works, in any manner or form.

(2) It shall be a matter for the legislation in the countries of the Union to permit the reproduction of such works in certain special cases, provided that such reproduction does not conflict with a normal exploitation of the work and it does not unreasonably prejudice the legitimate interests of the author.

[16] Articles 9 and 13 of the Agreement on Trade-Related Aspects of Intellectual Property Rights 1995 (TRIPs), to which New Zealand as a member of the World Trade Organisation also subscribes, are consistent. Article 9, which governs the scope and use of copyright and related rights, requires members to comply with Article 9 of the Berne Convention, while Article 13, says as to limits and exceptions:

Members shall confine limitations or exceptions to exclusive rights to certain special cases which do not conflict with a normal exploitation of the work and do not unreasonably prejudice the legitimate interests of the right holder.

[17] Frankel & McLay, Intellectual Property in New Zealand (Wellington Lexis Nexis Butterworths 2002) at para 2.2.3, drawing on the decision of the World Trade Organisation Dispute Panel, United States – s 110(5) US Copyright Act (WT/DS 160 (1999/2001)), say, and I accept, that the convention and the agreement are intended to be, and are, co-extensive and that TRIPs, as the Dispute Panel confirmed, subsumes ‘the entire Berne Convention acquis’.

[18] Frankel & McLay then helpfully summarise the Dispute Panel’s interpretation of Art 13 in this way:

The wording of Art 13 does not contain an express limitation in terms of the categories of rights under copyright to which it may apply. It states that limitations or exceptions to exclusive rights can only be made if three conditions are met. The three steps are, the exception must be a special case, it must not be in conflict with any normal exploitation of the work, and it must not involve any unreasonable prejudice to the copyright holder’s interests.

Threefold test

[19] This threefold test for validity expresses accurately, I accept, the duty subscribers to TRIPs assume – to be sparing in the exceptions to the protection of

copyright that they allow. I have not, however, found the test helpful in deciding the ambit of s 73. It is, unavoidably, too abstract. The values on which the test relies it does not define and each involves choices. Moreover, the 1994 Act must be presumed to be definitive as to what those choices are within New Zealand and is, itself, like TRIPs, a regime of some elasticity.

[20] Copyright extends potentially, in the 1994 Act, to every phase in the evolution of a work, protecting the author comprehensively. Yet it does not do so absolutely. Part 1 rights, which find their corollary in the infringements of rights set out in Part 2, are subject to the exceptions in Part 3, of which that in s 73 is one. Those Part 3 exceptions are numerous and to be given effect: s 16(2). They are not to be understood as discordant to the defining principle of the Act. They are integral to that principle and to its scope.

[21] Nor are those exceptions to any single design. Some are general, applying to all works but limited to specific purposes and users. Those referred to by the Judge relate to education, ss 44 – 47, to libraries and archives, ss 50 – 57, and to public administration, ss 58 – 60. Others are limited to particular users, particular works and particular acts. Section 70 (public reading or recitation) is one, as is s 73. Section 78 (reconstruction of buildings) is another. Most may serve public purposes, not private let alone commercial interests, except perhaps those of the author. But s 40 requires that each be treated independently, s 73 no less than any of the others.

[22] This must mean that any contrast between exceptions to copyright, at the level of words used or not used, can only take one so far. Section 78, for instance, answers explicitly the species of question in issue on this appeal. It confirms that when a building is reconstructed copyright in the original plans is not infringed; and that makes perfect sense. A building could not be reconstructed otherwise. That cannot mean, of itself, that because s 73 omits to condone infringement of underlying works by indirect copy, copyright will be infringed. Section 73 must be assessed against its own singular purpose.

English antecedent

[23] The conundrum s 73 presents is better approached by looking first to the English provision, s 62 of the Copyright, Design and Patents Act 1988, on which it is clearly modelled. It says this:

(1) This section applies to - (a) buildings, and

(b) sculptures, models for buildings and works of artistic craftsmanship, if permanently situated in a public place or in premises open to the public.

(2) The copyright in such a work is not infringed by – (a) making a graphic work representing it,

(b) making a photograph or film of it, or

(c) broadcasting or including in a cable program service a visual image of it.

(3) Nor is the copyright infringed by the issue to the public of copies, or the broadcasting or inclusion in a cable program service, of anything whose making was, by virtue of this section, not an infringement of the copyright.

[24] Section 62 is seen in England by the commentators, on a literal reading at any rate, as incoherent. The Modern Law of Copyright and Designs (3rd ed), Butterworths

2000, Laddie, H. Prescott P and Victoria M, at para 20.76 says this:

This provision, which has antecedents going back to 1911, effectively allows the public to draw, photograph or make other two-dimensional copies of buildings, or (if permanently situated in a public place or in premises open to the public) sculptures, models for buildings and works of artistic craftsmanship, without infringing the copyright or publication right ... This provision has not really been thought out properly, and contains several anomalies.

Speaking of the issue that concerns us here, the authors offer this illustration:

An artist paints a picture of a new building in Trafalgar Square; because of s 62, he does not infringe the copyright in the building; but he does infringe the copyright in the architect’s design drawings. Since most buildings are preceded by architect’s drawings, this provision is almost entirely useless.

And yet the authors then point to an opposed anomaly:

Further, one might have supposed that the intention was to allow the public to sketch, photograph, and so on, the above things for their own use; but the section is so worded, as were its predecessors, that the commercial publication of photographs of certain objects in art galleries and museums is not an infringement of copyright ...

These very tensions are evident also in s 73: Copyright and Design, Lexis Nexis,

2006, B Brown and others, 14,697-8, COP 73.3. And so here as well as in England the same question is unavoidable – were these tensions ever intended and are they inevitable?

[25] In England, another commentator, Copinger & Skone James on Copyright (15th ed) Sweet & Maxwell, 2005 at para 9 – 169, poses this question of s 62 directly, beginning with what it says, particularly the words in subs (2) ‘in such a work’:

The words ‘in such a work’ have the potential to limit the scope of this exception quite considerably. For example, someone who takes a photograph of a building might still infringe the copyright in the architect’s preliminary drawings or plans, since the words ‘in such a work’ would seem to refer only to copyright in the building itself.

The authors suggest that this conclusion ‘may be inevitable given the wording of the

Act’. They do not accept that the words used must be decisive. They continue to say:

... it should be noted that Parliament gave this section very little consideration during the passage of the Bill. The wording of this section therefore seems to be the result of the draftsman having paraphrased the wording of the 1956 Act which, it seems, was also not wide enough to cover copyright in preliminary drawings and plans. Yet it is clear that Parliament intended the provisions in the 1956 Act to have the same effect as those in the 1911 Act and these latter provisions were not so limited.

[26] Section 2(1)(iii) of the 1911 Act from which s 62 and s 73 derive was not, as it seems to me, that much more widely expressed than they are, stating as it then did that copyright was not infringed by:

the making or publishing of paintings, drawings, engravings, or photographs of a work of sculpture or artistic craftsmanship, if permanently situate in a public place or building, ...

What the authors may have had in mind is that s 35(1) of the 1911 Act enlarged

‘work of sculpture’ in s 2(1)(iii) to include underlying three dimensional works,

‘casts and models’. Yet s 2(1)(iii) still left two questions unanswered. Did it excuse any infringement of copyright by indirect copy of two-dimensional underlying works, concept sketches or designs? Did it excuse infringement of copyright in any underlying work, in two dimensions or even three, if they were not permanently in a public place or on display in building to which the public had access?

[27] Variants of these questions seem to me still to survive in the more apparently comprehensive regimes in Australia (s 73 Copyright Act 1968), and Canada (s 32.2), Copyright Act 1985).

Principle of efficacy

[28] Section 73 must be given some sensible effect and if on a literal reading that is not possible a less than literal reading may be not merely justified but essential to achieve its apparent purpose and to avoid absurdity: Inco Europe Ltd v First Choice Distribution [2000] 2 All ER 109, HL, Frucor Beverages Ltd v Rio Beverages Ltd [2001] 2 NZLR 604, CA

[29] In the Inco Europe case, Lord Nichols of Birkenhead, with whom the other members of the House agreed, confirmed, at 115, that in a confined range of cases the Court may go so far as to ‘add words or omit words or substitute words’ to correct not just ambiguity, but any obvious drafting error, subject to being

‘abundantly sure’ of three matters:

(i) the intended purpose of the statute or provision in question; (ii) that by inadvertence the draftsman and Parliament failed to give effect to that purpose in the provision in question; and (iii) the substance of the provision Parliament would have made, although not necessarily the precise words Parliament would have used, had the error in the bill been noticed.

Whatever else that may entail, and it can as that decision illustrates involve having to reach back to a statute’s antecedents, it does entail a close inquiry into the logic of the statute itself.

[30] Frucor, a case remarkably similar to this, illustrates the nature of this inquiry as well as any. There the Court of Appeal held by a majority that the privilege

enjoyed by patent attorneys under s 34 of the Evidence Amendment Act (No 2)

1980, resulting from their duty of confidence to their clients, had necessarily to extend to their clients. And in this the majority, at 612, called in aid two principles, which coincide largely with those in Inco Europe, the first of which at para [29] is this:

... where the main legislative purpose of the statute is clear, the provision should not be reduced to a nullity by a literal adherence to the language, unless the language is “intractable”. ...

[31] In deciding whether words are intractable or consistent with Parliament’s intent, the majority said at paras [34] and [35], they must be read not word by word but as a whole; and in para [35] added that to do this it is not necessary first to:

fix on any particular wording or the omission of any particular wording. The necessary implication can be made. It would frustrate Parliament’s intended purpose not to give effect to it merely because there are no particular words or phrases that are ambiguous or obscure to which the purposive interpretation can be attached.

[32] The majority was able to identify the purpose s 34 was intended to serve from an antecedent law reform report on privilege and the Minister’s remarks on the first and second readings of the Bill, as well as the explanatory note. It did not stop there. The majority was as much concerned to avoid absurdity, a principle that in para [30] it described as allied to the first. That second principle is, as the majority expressed it, simply this:

... the Courts will endeavour to avoid an interpretation of a section where that interpretation would lead to unworkable or inconvenient consequences.

...

And how the majority understood absurdity deserves emphasis. At para [28] they said this:

... the Courts have come to give the concept of ‘absurdity’ a wide meaning, using it to include virtually any result which is unworkable or impracticable, inconvenient, anomalous or illogical, futile or pointless, artificial, or productive of a disproportionate counter-mischief. ...

[33] In Frucor and Inco Europe the purpose to be served, once identified, trumped the text; and that, unavoidably I consider, is the only way to make sense of s 73, more especially as it is thought to express an exception to copyright with a clear

provenance that may have become more narrowly expressed than was ever intended.

Interpretation correct

[34] Section 73, as is all too evident from the opposed interpretations on this appeal, does not say enough to make complete sense. On either version words must be implied but with radically different effect and when those interpretations are set against what s 73 does say, I consider, that preferred by the Judge must be correct.

[35] To the extent that s 73 does speak, it does so plainly. It sets out to allow members of the public, including players in the market, to copy in two-dimensions sculptures permanently in the public domain and even for profit; and it does so by setting aside any copyright in the work that the author might otherwise enjoy. However s 73 is interpreted, that clear policy is not for compromise.

[36] Mr Radford’s interpretation does not, I think, allow s 73 that scope and effect. On his argument s 73 does not protect from any possible claim in copyright, as it says it does, anyone who copies sculpture in the public domain. It leaves them vulnerable to a claim in copyright if they indirectly copy any underlying work. It only protects them where there is no such work, or where copyright in it has expired, or where any indirect copy is not a true copy and does not infringe. It erodes the immunity s 73 seemingly confers, but without saying so.

[37] This interpretation is also impractical. Most sculpture permanently in the public domain will express in fully realised form some underlying work in which copyright could still inhere. Must anyone who copies any such sculpture first discover whether there are underlying works and whether they remain subject to copyright? Must they compare the finished with the underlying work to see whether any indirect copy of the latter would infringe copyright? Any such necessity would erode no less fatally the immunity s 73 apparently confers.

[38] The interpretation the Judge under appeal preferred suffers from neither of these deficiencies. His interpretation lies fully with the grain of s 73. It gives the most complete effect to what s 73 expressly permits by completing the logic. To

protect from any claim in copyright anyone who copies sculpture permanently in the public domain, his interpretation holds, s 73 must condone indirect copying of underlying works whether in two or three dimensions and whether or not they too are in the public domain. Only then the Judge says, and I agree, can the immunity s 73 apparently confers have face value.

[39] On this interpretation, moreover, s 73 remains a true exception. It only exempts copies of three-dimensional works that are permanently in the public domain, not works exhibited temporarily, and only two-dimensional copies. The work itself cannot be replicated in three-dimensions, whether directly or as a copy of one made in two-dimensions. The governing principle of the 1994 Act remains uncompromised.

Costs cross-appeal

[40] As to the lesser issue arising on the cross-appeal, Hallensteins contend that the Judge erred in reserving costs to await the outcome of Mr Radford’s third cause of action, the claimed breach of his moral rights. In this, Hallensteins says, the Judge took no account of DCR 47A, which requires costs be fixed on any interlocutory application and once fixed paid, ‘unless there are special reasons to the contrary’; or the ordinary principle in DCR 46(a) that the one who fails should pay the costs of the one who succeeds.

[41] There is no reason, Hallensteins, contends, why Mr Radford should not be obliged to pay costs immediately. The application was of his making. He was invited to discontinue the first two causes of action with no issue as to costs but he declined and Hallensteins was put to the point. It should not have to carry until the case is finally resolved the complete burden of the costs it has incurred.

[42] The rules do contain the presumptions that Hallensteins relies on but they are not the last word. They are subject to DCR 45 which makes all matters relating to costs, whether as to the proceedings as a whole, or any discrete phrase, ultimately discretionary. The Judge, though he had acceded to Hallensteins’ application to strike out Mr Radford’s first two causes of action and without difficulty, clearly did

not exclude the possibility that Mr Radford might succeed on his remaining cause of action. That the Judge evidently thought ought to displace the usual presumptions. Costs, he clearly thought, could only be considered accurately once the complete outcome was known. In that I cannot say that the Judge was wrong.

Conclusions

[43] For these reasons both the appeal and the cross-appeal will be dismissed. Hallensteins having succeeded in main part is, I consider, entitled to an award of costs on this appeal, as I should have thought at scale 2B. If, however, Mr Radford wishes to make any submission as to costs, that is to be filed and served within ten

_{working days and Hallensteins is to reply within the ten working days after that.}

P.J. Keane J